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Money Does Not Equal Wealth

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million, or three million dollars to live off of during retirement. The sad thing is that the investment advisor is planning for their client to sit on two million dollars of cash and slowly eat away at the nest egg. If the nest egg runs out, so does the ability to survive. Many investment advisors today are setting their clients up to have money in retirement, but absolutely no wealth. To me this is scary, because we cannot estimate what the cost of living will be in the future. What will the cost of living be five, ten, or fifteen years from now? I don’t have a crystal ball, but I know that it will be higher than today.

Will two million dollars

be enough?

I was recently reading a column in the Globe and Mail in which a traditional investment advisor offers weekly advice for a particular Canadian’s investment portfolio. The advisor was evaluating the portfolio of a fifty-five-year-old Toronto woman with a positive net worth of two million dollars. The advisor’s message to the woman was, “You cannot afford to retire.” Although this woman had two million dollars in assets, including her home, he advised that she continue to work, because two million dollars was no longer enough to retire in Toronto. The woman in the newspaper column is someone with money, but no wealth. In the 1970s, two million dollars was a lot of money; in today’s dollars two million dollars may not be enough to retire on.

We need wealth more than ever

before—and here’s why.

Most people wake up in the morning, have a shower, get dressed, and go to work to earn money. The problem is that most of us are not working to build wealth. Wealth is passive income that comes in every month whether we work or not. We need wealth more than ever before because the world is changing at a record pace. We no longer know what industries, businesses, and jobs will be relevant five years from now. In 2005 Myspace.com ruled the Internet and was sold for billions of dollars. By 2013, Myspace.com became a dinosaur with virtually no relevance on